AUTOMOTIVE CLOUD MARKET ANALYSIS

Automotive Cloud Market Size and Trends

The global automotive cloud market is estimated to be valued at US$ 27.90 Bn in 2024 and is expected to reach US$ 97.50 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 19.6% from 2024 to 2031.

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The automotive cloud market is expected to witness significant growth over the forecast period. The growth of this market can be attributed to increasing connectivity in vehicles and growing demand for personalized in-vehicle experience. Major automakers such as Amazon Web Services, Inc., Apple (US), Blackberry Limited, etc. are focusing on enhancing customer experience through vehicle connectivity features and advanced infotainment systems driven by Internet of Things (IoT) and cloud platforms. Cloud computing enables the seamless integration of these systems and facilitates remote access to various vehicle functionalities. The growing demand for in-vehicle entertainment and comfort is also driving the need for advanced cloud-based applications and services.

Drivers of the Market:

Connected Car Applications

The demand for connected car features and applications is growing rapidly across the globe. With internet connectivity built into vehicles, drivers can now access real-time information such as weather updates, traffic conditions, location-based services, and others while on the move. Cloud platforms enable automakers to develop and deploy these connected services effectively. Using the cloud, new features can be added over-the-air through seamless software updates without requiring the driver to visit a service center. This gives automakers an opportunity to enhance the driver experience on a continuous basis and also extract valuable usage data. Connectivity opens up possibilities for advanced mobility services involving infotainment, telematics, autonomous driving and more. As drivers experience the conveniences of connectivity, they will expect newer and better-connected services in the future. This helps the cloud gain more importance in developing and managing connected vehicle ecosystems.

For instance,, in November 2023, Salesforce cloud-based software company that provides businesses with tools to manage customer relationships, sales operations, and marketing campaigns, introduced new innovations in its Automotive Cloud, aimed at empowering automotive companies to leverage data and AI to deliver more personalized in-car experiences, streamline fleet management, and simplify auto lending and leasing processes.

Market Concentration and Competitive Landscape

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Advanced Driver Assistance Systems

Automakers are increasingly focusing on incorporating advanced driver assistance systems and autonomous driving capabilities in their vehicles. The development of such complex technologies requiring huge computational power is best supported by cloud platforms. Cloud infrastructure offers limitless scalability and processing capabilities for tasks like analyzing data from multiple sensors and cameras in real-time. It also ensures seamless software updates for Advanced Driver Assistance Systems (ADAS) algorithms based on latest road conditions, geography and other parameters. Moreover, cloud networks allow information exchange between vehicles and the outside world, an important factor for autonomous driving. With shared experiences, autonomous cars can deliver safer performance over time. The rise of mobility as a service further accelerates the need for advanced data-driven technologies using cloud computing. As self-driving vehicles become a reality, their effective management through automated cloud platforms will be crucial for success. This is likely to drive significant growth in automotive Cloud services.

Key Takeaways from Analyst:

Geographically, Asia Pacific currently dominates due to early widespread introductions of connected services. However, the North America region is expected to experience the fastest growth over the coming decade. This is driven by the large production volumes and competitive automotive industries. Overall, the automotive cloud presents a major opportunity for automakers to deepen customer engagement and efficiently develop new mobility services. With secure networks and privacy protection, this market has bright long-term prospects.

Market Challenges: Data Security and Privacy Concerns

One of the key challenges for the global automotive cloud market is data security and privacy concerns from automobile owners and manufacturers. As vehicles become more connected, there is a greater risk of cyber-attacks and hacking into critical vehicle systems. Ensuring secure and trusted data transmission across different networks and protecting sensitive user and vehicle information from unauthorized access will be a major hurdle for original equipment manufacturer (OEMs) to address.

Market Opportunities: Connected Vehicle Technologies and Over-the-Air Updates

The rising demand for connected vehicle technologies and over-the-air updates provides an opportunity for cloud service providers to partner with automakers. There is also a need for customized cloud solutions that can scale across global vehicle fleets. The push towards autonomous driving and new mobility services will further drive the need for cloud-based applications for mapping, navigation, and vehicle-to-everything.

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Insights by Vehicle Type: Convenience and Comfort Drive the Adoption of passenger vehicles

In terms of vehicle type, passenger vehicles is expected to contribute 55.4% share of the market owing to consumers' growing demand for in-vehicle comfort, connectivity, and entertainment features. As automotive technology continues to evolve at a rapid pace, passengers have come to expect seamless integration of their mobile devices and online content into the vehicle experience. The automotive cloud enables critical infotainment functions such as satellite navigation, voice assistance, music and media streaming that enhance convenience on the go. It allows over-the-air updates to improve the in-car experience over time. With the automotive cloud, passengers gain on-demand access to next-generation features like augmented reality heads-up displays without needing to visit a service center. This level of personalization and constant innovation is fueling adoption of connected passenger vehicles and driving the growth of this segment.

Insights by deployment type: Data Security Drives Preference for Private Cloud Deployment

In terms of deployment type, private cloud is expected to contribute 68.6% share of the market owing to heightened concerns about cybersecurity and data privacy in automotive systems. As vehicles become more connected, there is increased vulnerability to external threats like hacking and privacy breaches if sensitive drive and passenger data is hosted on a shared public cloud platform. Automakers recognize the need to establish robust safeguards around consumer information transmitted over the air. Private cloud infrastructure located on the manufacturer's secured internal servers provides centralized control and multi-layered protection against such risks. It ensures customer trust in new mobility technologies. By mitigating issues surrounding unauthorized access and leakage of private travel patterns, infotainment preferences etc., private cloud addresses a major adoption barrier and thus sees higher preference over public deployment alternatives.

Insights by Applications: Growth in Infotainment Applications Fuels Overall Cloud Demand

In terms of application, infotainment systems is expected to contribute 25.3% share of the market driven by the rising indispensability of in-car entertainment and communication services. Modern drivers and passengers expect intuitively designed onboard multimedia and seamless integration of their favorite content and apps into the car cabin experience. The cloud architecture facilitates the rapid development and deployment of these value-added infotainment features. It enables dynamic over-the-air upgrades to navigation databases, new audio/video streaming options and smartphone mirroring capabilities. Further, as vehicles transition to become mobility platforms, future application areas around augmented reality, ride-sharing connectivity, and autonomous driving will amplify the automotive cloud usage. Thus, the diverse possibilities under the broad infotainment category boosts adoption across vehicle segments and cloud deployment models to drive segment leadership in this sphere.

Regional Insights

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Asia Pacific is poised to dominate the global automotive cloud market, with an expected market share of 41.5% in 2024, surpassing other regions. This growth can be attributed to the rapid adoption of connected and autonomous vehicles, coupled with the increasing demand for cloud-based solutions in the automotive industry. The region's large population, growing middle class, and rising disposable incomes have fueled the demand for advanced automotive technologies, driving the adoption of cloud-based solutions.

Another region that is poised to grow at the fastest pace is North America, driven by the increasing adoption of cloud-based solutions in the automotive industry. The region's strong economic conditions, favorable regulatory environment, and the presence of major automobile manufacturers and technology companies have contributed to its growth.

Market Report Scope

Automotive Cloud Industry News

• In December 2023, Renesas Electronics Corporation, a leading provider of advanced semiconductor solutions, introduced a new cloud-based development environment designed to streamline the software design process for automotive AI engineers. The AI Workbench is a comprehensive virtual development environment that enables engineers to design, simulate, and fine-tune automotive software within the cloud. This innovative platform empowers developers to work more efficiently and effectively, leveraging Microsoft Azure services and built-in tools like Visual Studio Code and Renesas' SDK.
• In November 2023, Salesforce launched new innovations in its Automotive Cloud, designed to help automotive companies harness data and artificial intelligence to provide more personalized in-car experiences, manage fleets efficiently, and simplify auto lending and leasing processes. This cloud-based solution aims to unify automaker data from various sources, including vehicle telematics, service records, and customer information, to deliver real-time, contextualized insights and personalized experiences for drivers.
• In March 2022, Wipro Limited, a prominent global IT, consulting, and business process services company, introduced its "Cloud Car" platform. This innovative platform provides automobile manufacturers with an integrated, cloud-native software solution, backed by an end-to-end cybersecurity system, to accelerate innovation at a lower cost and ensure software-defined vehicles (SDVs) remain digitally relevant for years to come.
• In November 2021, Wipro introduced Click-Shift-Drive, a cloud-based automotive e-commerce solution designed to streamline the car-buying process. This end-to-end solution enables automakers and dealers to offer a seamless experience, from research and loan approval to purchase and delivery, leveraging Salesforce technologies and augmented reality capabilities. Key features include rapid deployment in just eight weeks and the ability to cater to the growing demand for online car-buying, with 50% of car-buying journeys already beginning online.

*Definition: The global automotive cloud market involves using cloud computing technologies for automotive services and applications. It allows automotive enterprises and consumers to access data storage and sharing, analytics tools, mobile applications, and others through cloud-based servers rather than local servers or personal devices. As connected car technologies continue to evolve and more vehicles become integrated with internet capabilities, the automotive cloud market provides scalable solutions for remote vehicle diagnostics, navigation and infotainment, telematics, over-the-air updates.

Market Segmentation

•  Vehicle Type Insights (Revenue, US$ BN, 2019 - 2031)
  • Passenger Vehicles
  • Commercial Vehicles
•  Deployment Type Insights (Revenue, US$ BN, 2019 - 2031)
  • Private Cloud
  • Public Cloud
•  Application Insights (Revenue, US$ BN, 2019 - 2031)
  • Infotainment Systems
  • Telematics
  • Fleet Management
  • Over the air Systems
  • Advanced driver-assistance systems
  • Others
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Airbiquity Inc.
  • Amazon Web Services, Inc.
  • Apple (US)
  • Blackberry Limited
  • Bosch (Germany)
  • Continental AG (Germany)
  • Denso Corporation
  • Delphi Automotive PLC
  • Ericsson AB
  • Harman International
  • Infor
  • LG Electronics
  • Microsoft
  • Oracle
  • Robert Bosch GmbH
  • Salesforce
  • SAP
  • ServiceNow
  • Sierra Wireless
  • Tomtom International Bv